Following today’s Budget announcement, the first since December’s general election, Rishi Sunak has provided much to consider. With a strong emphasis on supporting the economy against the impact of Coronavirus, housing related announcements featured towards the end of the budget. We have set out below some of the key points for Housing Providers to be aware of:
- In his Commons speech the Chancellor announced a 1% reduction in the PWLB rate for borrowing by local authorities for social housing. It looks, based on the published Budget Report, that this may only apply to Housing Revenue Account borrowing. If this is the case, whilst it is clearly welcome and will increase the capacity of local authorities to directly deliver additional social housing, it will mean that local authorities will not be able to draw down funds at the reduced rate to support joint ventures or other collaborations with RPs, including some significant major regeneration projects. The Government has today also announced a wider consultation on changes to PWLB borrowing designed to curtail certain investment activity of local authorities, facilitated through PWLB borrowing.
- An additional £9.5 billion will be made available for the Affordable Homes Programme, which means the Programme now has a total allocation of £12.2 billion. This is designed to help the Government deliver 1 million new homes of all tenures by the end of this Parliament. We will need to wait and see what tenures (and Government policies / priorities) will be supported out of this provision. Interestingly, there was no mention of the Government’s proposed flagship First Homes policy in the Budget Report.
- The Budget confirmed additional allocations from the Housing Infrastructure Fund totalling £1.1 billion for nine different areas, including Manchester, South Sunderland and South Lancaster. The Chancellor announced these will unlock up to 69,620 homes and will help to stimulate housing and infrastructure growth across the country. The Budget also announced additional housing investments in York Central, Harlow and North Warwickshire totalling £328 million, reinforcing the Government’s commitment to invest in northern regions of the Country.
- The Budget launched a new £400 million brownfield fund for pro-development councils and ambitious Mayoral Combined Authorities with the aim of creating more homes by bringing more brownfield land into development. The government will shortly invite bids that are ambitious and represent a significant increase in housing supply on brownfield land.
- The government remains committed to reducing carbon emissions from homes and to helping keep household energy costs low now and in the future. Details have not yet been published but the government has said it will announce plans shortly to improve the standards of new built homes.
- A new Building Safety Fund of £1bn has been announced. Please see our article on this here.
- The Secretary of State for Housing, Communities and Local Government will shortly set out comprehensive reforms to bring the planning system into the 21st century, followed by a Planning White Paper in the Spring. These reforms will aim to create a simpler planning system and improve the capacity, capability and performance of Local Planning Authorities (LPAs) to accelerate the development process. We will prepare a separate note on this following publication.
- The government will introduce a 2% SDLT surcharge on non-UK residents purchasing residential property in England and Northern Ireland from 1 April 2021. The money raised from the surcharge will be used to help address rough sleeping. Surprisingly, there was no further SDLT change despite hints of more radical changes earlier this year.